Dutch home sale prices down 6.4 percent from last year; First annual drop in years

Existing home prices in the Netherlands were 6.4 percent lower in the fourth quarter of 2022 than a year earlier, the Dutch association of insurers NVM reported on Thursday. Existing homes sold for an average of 407,000 euros in the fourth quarter, 3.7 percent lower than in the third quarter. The indications suggest the housing market is cooling off, but probably not enough to keep up with demand, the NVM said.

The annual average price fell for the first time in nine years. “This marks a turning point compared to last year when the price increased by about 20% year-on-year,” the NVM said.

The average price of newly-built homes last year was 498,000 euros, more than 90,000 euros higher than the sales price of existing homes. “This had an impact on the sales figures,” said Chris van Zantwijk, the vice-chair of NVM Housing.

Twenty percent fewer newly constructed homes were purchased in the fourth quarter compared to the previous quarter. Those sales were down 46 percent compared to a year earlier. “This will increase further due to sharply increased land and construction costs and mortgage interest rates,” Van Zantwijk said.

The housing supply last quarter was more than double that of Q4 in 2021. NVM realtors sold 32,500 homes in the last quarter of 2022, nearly 8 percent less than a year earlier.

Despite the increased supply and lower prices, 45 percent of the homes sold in Q4 were still sold above the asking price. That is still an improvement. In Q3, 66 percent of homes sold above the asking price, and in Q4 of 2021, it was still 88 percent.

The difference between the asking price and the sale price is also decreasing. In the fourth quarter of last year, the sale price was, on average, only 0.1 percent above the asking price, compared to 3.2 percent in the previous quarter.

Homes were on the market for an average of 30 days before being sold in Q4, three days longer than the previous quarter.

All these signs indicate that the market is cooling down. The number of available homes on the market is rising with the decrease in sales, but the housing market is still very tight and not yet able to meet demand, said Lana Gerssen, a real estate agent and the chair of NVM Housing. “The extremely overheated market seems to be behind us, although I am concerned about affordability given the increased mortgage interest,” she said.

“The population is continuing to grow and, with that, the demand for housing,” she added. Developers have been unable to keep pace with demand thus far. “My concern remains that we will not be able to meet the housing demand if the supply does not seriously increase.”